Translated version of this PSD: Arabic
Provision of an up to USD 200 million loan to the Suez Oil Processing Company (SOPC) to finance a package of energy efficiency investments and other refurbishments and installations at the Suez refinery. In particular, the Project will focus on the installation of a New Vapour Recovery Unit (VRU), the refurbishment of the old coker units and a number of energy efficiency investments identified to improve operational performance, environmental footprint and utilisation rate of the refurbishment of the old coker unit and a number of energy efficiency investments identified to improve operational performance, environmental footprint and utilisation rate of the refinery.
Provision of an additional USD 50 million loan to SOPC to finance the implementation of a new Asphalt Unit at the refinery so as to complete its upgrade programme.
The Project aims to alleviate some of SOPC's inefficiencies. It will enable SOPC to produce middle distillates in line with Euro 5 specifications, which have historically been imported thereby catering better for growing and shifting demand patterns in the country. Energy efficiency investments will lead to positive environmental benefits with greenhouse gas emissions savings estimated around 295 kt CO2 per year thereby enabling SOPC to optimize utilization rates and improve operational performance.
The sources of Transition Impact qualities for the project consist of: (i) Competitive and (ii) Green. The Project will also enable the Bank to further its policy dialogue initiatives in the oil and gas sector in Egypt, in particular in the context of the Oil & Gas Modernisation Programme launched by Egyptian Ministry of Petroleum.
The loan will be provided on a sovereign basis to the Arab Republic of Egypt. The ultimate beneficiary will be SOPC.
EBRD Finance Summary
Total Project Cost
Environmental and Social Summary
Categorised B (2014 ESP). The Project is expected to improve the environmental and social (E&S) performance of the SOPC refinery, including reducing emissions to air and realising energy and resource efficiencies, leading to a reduction in greenhouse gas (GHG) emissions in excess of 295kt CO2 per year. Further, implementation of the ESAP will substantially improve the E&S performance of the refinery as a whole, notably with respect to industrial and occupational health and safety, water use, wastewater treatment and emission reductions and improve the approach to E&S management through the implementation of ISO certified management systems. The Project is consistent with the GET approach.
Environmental and social due diligence ("ESDD") has been conducted by a consultant and included an assessment of the potential benefits and risks associated with the Project; a review of the environmental and social performance of existing operations; a review of the capacity of SOPC to manage risks associated with the Project and existing operations; and the identification of investments and actions required to bring the Project and the refinery in line with the EBRD's Performance Requirements ("PRs"). The ESDD also included the development of a Non-Technical Summary (NTS) and a stakeholder engagement plan (SEP) to guide future stakeholder engagement and information disclosure activities at the refinery (see below).
Key E&S issues considered in the ESDD included those typically associated with refineries such as energy and water use, emissions to air, waste management, occupational, industrial and community health and safety risks, labour issues and contractor management, transport risks, noise and potentially legacy issues such as soil and groundwater contamination and hazardous waste issues. These issues have been reviewed against the PRs and EU standards, such as the Industrial Emissions Directive (including EU Best Available Techniques (BAT) for the sector), the ATEX Directive and the Seveso Directive.
The ESDD has shown that SOPC has a good level of EHS management capacity in place and is committed to improving its E&S performance. However, noting the age of the refinery, and the lack of investment to date, the ESDD has identified a number of areas where substantial improvements are required to align the refinery with the Bank's requirements. The Project, specifically installation of the Vapour Recovery Unit, will significantly reduce flaring of gas on site thereby reducing GHG emissions and increasing production throughput. Revamping the coker and upgrading the hydrodesulphurisation unit will enable the refinery to produce fuels of higher quality and energy and resource efficiency investments will reduce overall energy and water demand. Beyond the Project, however, improvements are required to the refinery as whole, including the approach to waste management; abatement of, and monitoring, emissions to air; improving industrial safety provisions and controls in line with the EU Seveso III and ATEX Directives; recirculating and reducing cooling water uptake; improving the quality of wastewater discharges; improving general health and safety; and implementation of an ISO aligned systems approach to E&S risk and energy management.
An Environmental and Social Action Plan ("ESAP") agreed with SOPC will ensure that the Project is developed in line with the PRs and EU standards. The ESAP also includes a road map to align the rest of the refinery with the PRs in the long term thereby addressing the issues identified and improving overall E&S performance. The Bank's financing (the Project), and the associated ESAP, will not, however, allow the refinery as a whole to attain full alignment with the PRs within the short to medium term due to the magnitude of the issues identified. Furthermore, the ESAP requires the undertaking of various studies by SOPC to determine the options available, and the feasibility thereof, with respect to some of these issues including emission abatement and further flaring reduction, water reuse and discharge controls. Therefore, derogation from fully complying with the Bank's E&S Policy, specifically with respect to EU BAT required by PR3, at the refinery level will be requested from the Board. Progressive implementation of the ESAP with the support of the PIU and the Bank will, nonetheless, substantially improve the E&S performance of the refinery bringing it closer to meeting the PRs. The Project and ESAP implementation will be monitored by ESD with the support of consultants where necessary.
Update - New Asphalt Plant (VDU) and Coker Upgrade
Categorised B (ESP 2014). The addition of a new Asphalt Plant using a Vacuum Distillation Unit (VDU) system to the existing SOPC refinery, as well as further upgrades to the coker (moving from the old six drum to a two drum coker unit), does not change the categorisation of the original Project. These Project changes have been subject to review by an independent consultant. Environmental and social (E&S) impacts and risks associated with these Project changes can be managed and addressed through the existing management provisions. Each unit and upgrade will be required to meet EU Best Available Techniques (BAT) for the sector including with respect to emissions to air, emissions monitoring systems and product storage. Further, existing safety risk assessments will need to be updated. These requirements are reflected through an update to the existing ESAP, which has been agreed with SOPC. The VDU is expected to enable the refinery to produce better quality fuels, including Euro 5/6 fuels and low sulphur marine bunker fuels, which will contribute to improving air quality in Egypt It will also allow for the production of asphalt. The VDU is associated with GHG emissions although these are largely offset by further GHG reductions expected from the additional improvements to the coker. Net GHG savings will decrease from 297 ktCO2e/year to 289 ktCO2e/year. Further CO2 reductions are expected as the energy efficiency programme is implemented. The Project changes do not change the original derogation granted by the Board from fully complying with the Bank's E&S Policy at the refinery level (rather than the Project level). The Non-Technical Summary (NTS) document has been updated.
TC funds consist of EUR 83k for feasibility studies and environmental and social due diligence.
Company Contact Information
Eng. Hussein Awad
Inspection General Manager SOPC
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Text of the PIP
Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
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